Extended Warehouse Management - A 3PL Perspective Max Spilker, Roberto Omiccioli (Westernacher)
Learning Points Common challenges in a 3PL EWM implementation Best practices to overcome implementation gaps/issues Bill your WH operations to your customers 2
Westernacher History in Warehouse Management 1980 1993 2000 2004 2005 2007 2010 Starting Warehouse Management activities Booming period of automated highbay warehouses in Germany Individual programming / mainframe systems Focus on SAP products & technology R/2 and R/3 projects (FI, CO, PS, MM, SD, PP) Logistics: Development of WLS, our own WMS running 100% on ABAP; 1st release in 1994 1st project with SAP LE-WM 4.6C WLS running on Netweaver 1st project with LE-TRM 1st SAP-EWM implementation as a Partner of SAP Germany at a leading automotive OEM 1st SAP-EWM go-live in 3PL industry. Birth of Warehouse Billing Engine. 3
Questions that keep 3PLs awake at night 1. How to effortlessly integrate new clients, products, services and client specific processes? 2. How to organize the warehouse in order to achieve required service levels and work efficiently at the same time? 3. How to organize the material and information flows? 4. How to bill the client for the provided services? 4
Some challenges are specific to the 3PL industry Challenge Unexpected goods receipt Product number issue Building interfaces to customer systems Onboarding new clients Description EWM expects that ASN is available before unloading 3PLs do not always know what to receive Client vs. own product number Use client number for external use and own product number for internal processes In order to transfer customer s master data and transaction data to own systems Requirement for quick IT support for new clients Creation of organizational objects and master data Make use of predefined logistics services and corresponding process templates Billing for logistics services 3PL need capability to bill clients for provided logistics services
1 [ 3PLs do not always know what to expect Standard SAP EWM Inbound Process Potential 3PL Inbound Process ASN Item Material Qty 10 115566 500 20 133445 200? Unloading GR Zone GR Zone Unloading Qty correct? Counting & Manual creation Yes No Inbound Delivery Item Material Qty Inventory Putaway Exception 10 115566 500 20 133445 200
Some challenges are specific to the 3PL industry Challenge Unexpected goods receipt Product number issue Building interfaces to customer systems Onboarding new clients Description EWM expects that ASN is available before unloading 3PLs do not always know what to receive Client vs. own product number Use client number for external use and own product number for internal processes In order to transfer customer s master data and transaction data to own systems Requirement for quick IT support for new clients Creation of organizational objects and master data Make use of predefined logistics services and corresponding process templates Billing for logistics services 3PL need capability to bill clients for provided logistics services
Integrating multiple clients might lead to an issue with the material numbers Client 1 Client 2 Client 3 Client 4 Number Range: A01 B99 C01 F99 G01 H59 B95 B99 3PL ERP Material EWM CIF Material
Our Recommendation: Assign material number from own number range. Use clients number for external purposes. ERP ERP Material Master EWM Warehouse Material Master CIF
Some challenges are specific to the 3PL industry Challenge Unexpected goods receipt Product number issue Building interfaces to customer systems Onboarding new clients Description EWM expects that ASN is available before unloading 3PLs do not always know what to receive Client vs. own product number Use client number for external use and own product number for internal processes In order to transfer customer s master data and transaction data to own systems Requirement for quick IT support for new clients Creation of organizational objects and master data Make use of predefined logistics services and corresponding process templates Billing for logistics services 3PL need capability to bill clients for provided logistics services
There is no unique solution to the interface challenges Web Portal Client 2 IDOC Interface SAP ERP 3Pl Invoicing Client 1 Communication Platform KA M EWM 3Pl FO Multiple sites / Warehouse numbers
Some challenges are specific to the 3PL industry Challenge Unexpected goods receipt Product number issue Building interfaces to customer systems Onboarding new clients Billing for logistics services Description EWM expects that ASN is available before unloading 3PLs do not always know what to receive Client vs. own product number Use client number for external use and own product number for internal processes In order to transfer customer s master data and transaction data to own systems Requirement for quick IT support for new clients Creation of organizational objects and master data Make use of predefined logistics services and corresponding process templates 3PL need capability to bill clients for provided logistics services
The 3PL onboards ValueCustomer as a new 3PL client Client ValueCusto mer Goods Receipt 3PL ValueCustomer s products Goods Distribution ValueCustomer s customers 3PL s Services for ValueCustomer Call Center Services Order Management Warehouse Logistics Billing on behalf of ValueCustomer
Steps to be performed to support this business 1. Customizing Plant, storage location, integration into warehouse number Or, use vendor consignment stock to seperate from other stock in the warehouse. 2. Interface Interface to client system for master / transactional data 3. Master Data 4. Assign process templates Material Master Packaging specifications (Customers) (Prices) Assign process templates according to sales contract 5. Programming Client specific labels Requirements not covered by SAP standard and process templates
Customizing and Master data: Organizational elements required to onboard a new client such as ValueCustomer Object ValueCustomer SAP Object Plant and Storage Locations Or vendor consignment stock Customer and Vendor master data Best Practice Approach Follow defined procedures / checklist. Create by copying sample data ValueCustomer s Clients ERP Customers EWM Business Partners Also possible to use one customer with multiple ship to addresses. Interface via IDOC from ValueCustomer s ERP system or via communication platform. ValueCustomer s Products ERP and EWM product master data Excel upload - LSMW ValueCustomer s Packaging Information Packaging specifications should be created for each product to ensure smooth EWM processes Excel upload standard transaction available in EWM. ValueCustomer s product prices SD pricing master data if required for printing or billing on behalf off. Interface or Excel upload Agreement between Tech Data - ValueCustomer Sales contract Basis for billing engine
Both system, ERP and EWM support the integration of multiple 3PL clients into the same warehouse. Plant 1 (ValueCustomer) Plant 2 (Client 2) ERP SLOC ROD SLOC AFS SLOC ROD SLOC AFS Warehouse Number 00A EWM Stock A Owner: (ValueCustomer) Warehouse Number 000A Stock A Owner: (Client 2)
In EWM, stock but also warehouse tasks always contain a reference to the stock owner Example of stock on bin: Example of pick warehouse task: 1 In a multi client warehouse, stock and all tasks are always separated by owner.
Process templates: Predefined service offerings / process templates make onboarding easier Procurement Management Distribution Management Customs Strategic Purchasing Stock Financing Operational Purchasing Sales (cold calling) Billing Web Portal Import Customs Warehouse Export Warehouse Logistics Distribution Logistics Production Services Goods Receipt Storage Order Management Storage Production Supply Quality Inspection Quality Inspection Picking Preassembly Packaging Return Management Production Warehouse Packaging material warehouse Value added services Packing Transport Production Transport
Some challenges are specific to the 3PL industry Challenge Unexpected goods receipt Product number issue Building interfaces to customer systems Onboarding new clients Description EWM expects that ASN is available before unloading 3PLs do not always know what to receive Client vs. own product number Use client number for external use and own product number for internal processes In order to transfer customer s master data and transaction data to own systems Requirement for quick IT support for new clients Creation of organizational objects and master data Make use of predefined logistics services and corresponding process templates Billing for logistics services 3PL need capability to bill clients for provided logistics services
Typical pain points for Logistics Service Providers with warehouse billing 20
Development principles of Warehouse Billing Solution based on SAP EWM technology 21
Warehouse Billing Solution Architectural Overview EWM Data extraction, and aggregation EWM with WBS ECC Combination with prices and materials to create invoice ERP Contracts Daily Data Extraction Aggregation & Analysis Billing Run Debit Request Material + Price Invoice
Warehouse Billing Solution Execution Mechanics 23
Key Learnings Decide which approach to take for mapping customers into your system (vendor consignment vs plant) Create templates/standards to facilitate customer onboarding process Connect customer s system to your system to streamline operations and increase productivity Have a flexible and scalable billing solution that doesn t require tedious manual labor at month-end 24
More information Max Spilker (max.spilker@westernacher.com) Roberto Omiccioli (roberto.omiccioli@westernacher.com) Website: http://www.westernacher.com/en/industry/logistics-service-providers 25
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